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Foto do escritorSteven Bogaert

Post-Pandemic, Americans Souring On "Made In China".

Atualizado: 29 de mai. de 2020

The Qingdao port in China as seen on May 15, 2020.- PHOTOGRAPH BY Costfoto / Barcroft Studios /... [+]BARCROFT MEDIA VIA GETTY IMAGES.

 

Some 41% of Americans say they will not buy Made in China products ever again, according to a survey by Deutsche Bank’s dbDig, the German bank’s big data platform. The survey was mentioned in a recent report by Apjit Walia, managing director for technology investment strategy at Deutsche Bank.


“I’d love to move everything back to the U.S.,” says Ravin Gandhi, CEO and founder of GMM Nonstick Coatings, a chemical company with manufacturing in China and India. He says moving supply, however, is a function of GMM’s clients. “Right now the vast majority of large American brands source their goods from China and require local deliveries. But if they move we will definitely move,” he says.


The 41% figure may look high, but it can also be interpreted to mean that a decent majority are not going to shun China altogether. For many products, it is impossible at this time.

Another 35% of Chinese surveyed said they would not buy Made in America, either.


Tempers and emotions are running high in both populations due to the economic destruction caused by virus outbreak first reported in Wuhan, China in December. All of China’s Western trading partners are angry. How long that anger lasts, and what it results in, is anybody’s guess at this point. Washington is making the most noise about it, so far.

 
 

The fact that this is an election year also means China can count on being a punching bag. Today’s headlines in the South China Morning Post show concern over President Trump’s threats to increase tariffs as a form of punishment for the coronavirus, going so far as to hint that it would be better if the U.S. stopped relying on China as a manufacturing hub. These are often private business relationships that are deeply personal, and hard to upend quickly. In the meantime, China is hoping this blows over as the pandemic winds down.


Earlier this week, billionaire George Soros said that he feared the world post-pandemic meant deteriorating U.S.-China relations, among other things. Any worsening of relations between the two sides would deal a mighty blow to a globalization that, for years, has centered around China’s low cost labor force and lackluster regulatory environment.


“Before the pandemic I already saw a simmering issue regarding environmental issues, especially from food producers who wanted full transparency through their supply chain,” says Bill DeMartino, chief customer officer for RiskMethods, a supply chain risk management solution whose global headquarters sit in Munich. “These companies wanted to show consumers online where all the ingredients came from. They could tell their consumers who care about supporting small businesses, or local business. All of that was happening in the trade war. Post-pandemic, you’re going to have a simmering pool of forces – companies that are going to look at the risk of being reliant on China, or being seen as making everything there. For consumers, that could become a negative. New technologies, robotics, artificial intelligence...all of this will make onshoring more feasible,” DeMartino says, adding that exiting China means products will be made here.


This is more true the more complicated the product line. Baseball hats and Christmas ornaments might all be made in China, but electronics may only be partially made there.


Taiwan Semiconductor Manufacturing, the biggest chipmaker in Asia, said it plans to build a $12 billion nano-chip making factory in Arizona, Reuters reported today.


Commerce Secretary Wilbur Ross said today that Arizona gave some incentives to TSM but did not expand on that. He said that he hopes TSM’s other suppliers also move to Arizona.


Senator Marco Rubio recently introduced legislation to help bring essential medical supplies back to the U.S.

The pandemic showed everyone how reliant the country is on China for personal protection equipment such as basic surgical masks, and even some generic drugs like ibuprofen.

The trade war was bad for China. The pandemic is turning out to be even worse.

“We track corporate ownership of a company. Anytime a company gets bought out by a Chinese company, that’s a red light for some of our customers now,” says DeMartino. “Of course that’s all going to depend on the product. Maybe going forward companies will make more of a calculated cost of doing business in China. Could it hurt their ability to sell?” he asks out loud. “That’s a calculus that the supply chain never had to make.”

 


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